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USD/JPY – Yen Unchanged, Markets Eye Current Account, GDP

USD/JPY continues to hug the 114 line in the Wednesday session. On the release front, the US releases JOLTS Job Openings, with the indicator expected to rise to 5.53 million. Japan will publish Current Account and Final GDP, with both indicators expected to improve. On Thursday, the US releases unemployment claims, with the indicator expected to rise to 272 thousand.

In Japan, consumer indicators started the week on a sour note, as Consumer Confidence dropped to 40.9, marking its lowest level since May. Last week, consumer spending indicators disappointed, as Household Spending and Retail Sales both posted declines. The Japanese yen is down sharply in November, dropping 8.0% against the strong US dollar. The greenback has enjoyed broad gains since the election of Donald Trump and the expected rate hike by the Federal Reserve this month has bolstered the dollar. However, the markets are expecting positive news from Japanese indicators on Wednesday. The current account surplus is expected to increase and the estimate for Final GDP stands at 0.6% for the third quarter.

The Federal Reserve will meet next week and the markets have priced a rate hike at 95 percent, most likely a quarter-point increase. This would mark the first hike by the Fed since last December, and sentiment towards the US dollar remains high. It will be interesting to see what happens early next year, with the Trump administration taking over in Washington. Trump has said he will increase government spending and cut taxes. This could lead to higher inflation levels, which means the Fed may need to adjust its outlook.

USD/JPY Fundamentals

Wednesday (December 7)

Thursday (December 8)

*All release times are EST

*Key events are in bold

USD/JPY for Wednesday, December 7, 2016

USD/JPY December 7 at 7:50 EST

Open: 114.04 High: 114.40 Low: 113.87 Close: 114.02

USD/JPY Technical

S3 S2 S1 R1 R2 R3
111.45 112.48 113.86 114.83 115.85 116.88

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged in the Wednesday session. Currently, short positions have a strong majority (59%), indicative of trader bias towards USD/JPY breaking out and losing ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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